The UK Government’s Motor Insurance Taskforce final report has drawn a mixed but engaged response from across the market, with stakeholders welcoming its direction while warning that the detail of implementation will determine whether it delivers lasting benefits for consumers and insurers.
Angelica Solutions director Sarah Vaughan (pictured above, left) said the report is “a positive step forward but there’s still work to do,” arguing that regulation, claims processes and road safety all need to reflect “the commercial realities of our market.” She cautioned that without this alignment, “there’s a risk we simply move costs around rather than remove them.”
Vaughan pointed to previous interventions such as the General Insurance Pricing Practices (GIPP) rules, noting that while they were “designed to protect consumers from price walking,” they have contributed to “a rise in stripped back products and reduced consumer confidence in choosing the right cover with no clear benefit in lower renewal premiums.”
In her view, “GIPP was about fairness” in principle, but in practice removed a core profit stream and increased pressure to recoup margin elsewhere.
She said one visible result has been the growth of policies that appear cheaper at inception but provide less protection at claim stage, and called for “a proper and timely review of the longer-term effects of these changes.”
Vaughan also urged the taskforce to go further on claims reform, highlighting “the widespread practice of insurers charging other insurers significantly more to repair vehicles in non-fault claims than they would pay themselves for the same work.”
That practice, broadly accepted as commercially legitimate following the Coles v Hetherington case, is “a quiet but significant source of income for many insurers,” Vaughan said, and ultimately “customers are footing the bill.”
Any intervention in this area, she argued, must consider where that revenue will be replaced, as insurers are likely to seek it elsewhere “unless there is a wider shift in how the market operates.”
Vaughan also described a missed opportunity on data and road safety, saying “we have the data to understand where and why serious collisions happen but sharing that information is almost impossible” due to GDPR, commercial sensitivities and legal costs.
She called for “a government-backed solution that enables data to be shared safely and for public good” and said the next phase “must include more engagement with the industry and more focus on the practical realities of delivering change.”
AXA UK, meanwhile, focused on the taskforce’s backing for electric vehicle (EV) measures, particularly the commitment to consult on battery health certificates.
The insurer has previously argued that standardised battery health information would help stimulate the second-hand EV market and support insurers’ ability to evaluate vehicle values in a relatively new segment with limited historical data.
Dougie Barnett (pictured above, right), director of commercial customer risk management at AXA UK, said the government’s move on battery health measures is “good news for consumers and motor traders alike.”
He added that consistent reporting of battery condition across makes and models could increase buyer confidence, simplify purchasing decisions and make it easier for motorists, especially cost-sensitive drivers, to transition to EVs via the used market.
